Damage from Sandy Still Hampering Trading

Some 40-odd days after Sandy hit New York, some traders are still forced to use back-up facilities.

It's been more than a month since superstorm Sandy hammered the New York metropolitan area, but the city still isn't back to normal. Sections of the Rockaways on Long Island continue to rebuild and recover. Portions of the Jersey shore are still devastated. PATH train service from New Jersey to lower Manhattan is disrupted, forcing thousands of financial services employees who work in and around the financial district to figure out another way to get to the office.

Most surprising, yet unknown to many, is that many buildings in the areas flooded in lower Manhattan remain without power to this day. Yes, some 40-odd days later, some buildings are still waiting to get the lights turned back on. It turns out that almost everything that was touched by flood waters in these buildings needed to be removed, replaced and inspected before being connected back to the power grid. Wiring, transformers, telecom equipment, boilers, insulation, sheetrock and carpeting, to name a few of the most common items, all need to be replaced before city inspectors will allow workers to return to their offices.

As a result, some financial firms are still waiting to return to their primary offices and are working in back-up facilities scattered around the tri-state area. Bloomberg LP, which has its own disaster recovery location on Houston Street, opened up its facility to customers displaced by Sandy two days after the storm hit. On November 29, exactly one month after Sandy made landfall in New Jersey, Bloomberg still had 165 customers using the location. At some points during this period, Bloomberg had over 200 users in the facility, according to Gerard Francis, chief of staff, Financial Products at Bloomberg.

"This is our disaster recovery site and it is designed for Bloomberg use," Francis says. The facility is designed to house around 400 Bloomberg employees in case of an emergency, he says. Although power was lost at the facility for about five days, back-up generators ran the entire time, Francis adds.

Bloomberg clients who have been displaced by hurricane Sandy are able to trade and work out of Bloomberg's disaster recovery facility on Houston Street. Buy side and sell side traders have been separated and sit in different areas of the facility.

One of Bloomberg's clients, Shaun Tamarozzi of Techemet Metal Trading told Wall Street & Technology in an email that Techemet's offices on 80 Broad Street were closed indefinitely following Sandy. "We were scrambling to find new offices to resume trading," Tamarozzi writes. He says he received an unsolicited call from a Bloomberg representative, Troy Roberts, to use the Bloomberg facility. "This was a welcome relief and solved our immediate problem of business continuity," Tamarozzi says.

The Bloomberg facility was also staffed with approximately 30 Bloomberg networking, technology, security, trading solutions, telecommunications, analytics support and sales staff to assist the clients in getting set up, Francis relates. "Traders are used to having an infrastructure and a support staff," he says. At the disaster recovery facility, Bloomberg helped to reestablish connections where it could, but many of the client's proprietary backend systems were not available. "They were solving all sorts of issues and helped assist everyone to get up and running," he says. "We had a lot of people engaged" in the effort.

"More impressive than the office space was the professional, knowledgeable and accommodating Bloomberg Staff," continues Tamarozzi, who adds that his Bloomberg representative, Stephanie Adler, arranged for Techemet to stay for an additional week if need be.

It's quite incredible that buildings of some vendors and financial institutions in the financial district are still not operational after almost two months. It will be interesting to see if companies will change their DR strategy in the coming year.

I agree! Facilities may have plans for back-up facilities, generators, and technology, but as was the case during Sandy, the most difficult element was getting commuters into the city -- or even onto the roads -- after the storm.